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JOINT CIRCULAR No

JOINT CIRCULAR No. 05/1998/TTLT-KHDT-TP OF JULY 10, 1998 GUIDING THE ESTABLISHMENT AND BUSINESS REGISTRATION PROCEDURES FOR PRIVATE ENTERPRISES AND COMPANIES

With a view to simplifying the establishment and business registration procedures for private enterprises and companies and replacing already promulgated circulars guiding the establishment and business registration procedures for the private enterprises and companies;

After consulting the bodies concerned, the Ministry of Planning and Investment and the Ministry of Justice hereby jointly provide guidance on the establishment business registration procedures for private enterprises and companies as follows:

I. DOSSIERS OF APPLICATION FOR ESTABLISHMENT AND BUSINESS REGISTRATION

1. For private enterprises, such a dossier shall comprise:

1.1. The application for the establishment of the private enterprise; if the enterprise requests investment preferences such request must be included therein;

1.2. Initial business plans or investment projects for cases where investment preferences are applied for;

1.3. Bank's certificates on the amounts of VND, foreign currencies and gold that enterprise owners have in their bank accounts;

1.4. Notarized minutes of the Council evaluating private enterprise owners' initial investment assets in kind;

The initial investment capital shall not be lower than the legal capital of the business line or trade which enterprise owners have registered under the provisions of law. Where business registration is made for more than one line or trade, the initial investment capital must not be lower than the legal capital of the line or trade that has the highest legal capital level.

1.5. Certificates on private enterprises' business head offices (house ownership certificates, house leasing contracts or other valid documents evidencing the lawful use of the places as the enterprises' head offices);

1.6. Certificates on professional qualifications of private enterprise owners or persons hired to manage and run private enterprises' business operations, for cases where private enterprises make business registration for those business lines or trades for which the law requires managers to be professionally qualified.

Where private enterprise owners need to have establishment licenses first while the dossiers for business registration have not been prepared, there must be an application for establishment, an initial business plan or investment project. When making business registration, private enterprise owners shall complete their dossiers with those documents that have not been included therein as stipulated in Point 1, Section I hereof.

2. For companies, such a dossier shall comprise:

2.1. The application for the establishment of the company. If the company requests investment preferences, such request shall be included therein;

2.2. Initial business plans or investment projects, for cases where investment preferences are applied for;

2.3. The company's charter which shall be accompanied by:

2.3.1. The minute of the meeting that elects the Board of Management, the Director-General (Director), the Company Control Board for stock companies and limited liability companies, composing at least 12 members or the minute of the members' meeting appointing the company director for limited liability companies composing not more than 11 members.

2.3.2. The record of capital contribution, which has been adopted by the company's Members' Council, clearly stating the capital contributed in cash and the capital contributed in asset value.

The company's charter capital shall not be lower than the legal capital of the business line or trade which the company has registered under the provisions of law. Where business registration is made for more than one line or trade, the charter capital must not be lower than the legal capital of the trade that has the highest legal capital.

2.4. Certificates on the company's business head office (house ownership certificates, house leasing contracts or other legal documents evidencing the lawful use of the place as the company's head office);

2.5. Certificates on the professional qualifications of the person who runs the company's business activities, for cases where the company registers those business lines or trades for which the law requires managers to be professionally qualified.

Where a company needs to have the establishment licence first while the dossiers files for business registration have not been prepared, there must be an application for establishment, an initial business plan or investment project. When making business registration, the company shall complete their dossiers with those documents that have not been included therein as stipulated in Point 2, Section I hereof.

3. Private enterprise owners and founders of company shall take responsibility before law for the accuracy of the contents stated in the dossiers of application for establishment and business registration.

II. PROCEDURES FOR CONSIDERATION AND GRANTING OF ESTABLISHMENT LICENSES AND BUSINESS REGISTRATION CERTIFICATES

1. Private enterprise owners, company founders or their authorized representatives shall submit 3 (three) sets of dossiers of application for establishment and business registration to the provincial/municipal Planning and Investment Services of provinces and cities where the enterprises or companies plan to locate their head offices.

Where private enterprise owners and companies locate their head offices in industrial parks, export processing zones or high-tech parks (hereinafter called industrial parks), the dossiers applying for establishment and business registration shall be submitted to the Industrial Parks' Management Boards so that the latter shall present them to People's Committees of provinces and centrally-run cities (hereinafter referred to as provincial People's Committees) for issuing establishment licenses and investment preference certificates (if any). The Industrial Parks' Management Boards shall coordinate with the Planning and Investment Services in issuing business registration certificates by the latter after establishment licenses were granted by provincial People's Committees.

- Within 7 days from the date of receipt of the valid dossiers as stipulated in Section I hereof, the provincial/municipal Planning and Investment Services shall be responsible for consulting the concerned branch managing services. Within 10 days from the date of receipt of valid dossiers, the branch managing services shall give their comments in writing so that the provincial/municipal Planning and Investment Services may submit them to the provincial People's Committees for issue of establishment licenses.

- Where private enterprise owners and companies are entitled to investment preferences, the provincial People's Committees shall issue the investment preference certificates together with the establishment licenses.

Following the issue of establishment licenses by provincial People's Committees, the provincial/municipal Planning and Investment Services shall issue immediately business registration certificates to private enterprises and companies if the latter submits sufficient business registration dossiers.

2. The procedures for consideration and issue of establishment licenses and business registration certificates to private enterprises and companies dealing in those lines or trades stipulated in Article 5 of the Law on Private Enterprises and Article 11 of the Law on Companies as follows:

- Within 7 days from the date of receipt of valid dossiers as stipulated in Section I herein, the provincial/municipal Planning and Investment Services shall assist provincial People's Committees to forward these dossiers to branch managing ministries for comments. Within 7 days from the date of receipt of valid dossiers, branch managing ministers shall submit their comments in writing to the Prime Minister.

Where the Prime Minister authorizes the branch managing ministers to give their comments, the latter shall, within 7 days from the date of receipt of valid dossiers, give their comments in writing to the president of the provincial People's Committees that ask for comments. Past this time limit, if the latter does not receive such comments in writing by branch managing ministries, the presidents of the provincial People's Committees shall have the right to consider and decide on the issue of establishment licenses to private enterprises and companies.

- Within 10 days from the date of receipt of comment notice from the Prime Minister or the branch managing ministers, the provincial People's Committees shall issue establishment licenses to private enterprises and companies. Where establishment licenses are refused, the provincial People's Committees shall explain the reasons in writing.

Where private enterprise owners and companies are entitled to investment preferences, the provincial People's Committees shall issue investment preference certificates together with the establishment licenses.

Following the issue of establishment licenses by the provincial People's Committees, the provincial/municipal Planning and Investment Services shall immediately issue business registration certificates to private enterprises and companies if the latter submit sufficient business registration dossiers.

3. Procedures for issue of business registration certificates to private enterprises and companies dealing in those lines or trades required by law to have practice certificates or business qualifications certificates shall be as follows:

3.1. For business lines or trades that must have licenses issued prior to the business registration as stipulated by laws, the provincial/municipal Planning and Investment Services shall forward the dossiers to competent bodies and request the issue of licenses. The competent bodies must, within the time limit prescribed by law, issue licenses or reply in writing in cases where licenses are not granted. The time limit for issue of business registration certificates shall be calculated from the date the provincial/municipal Planning and Investment Services receive licenses or written reply from the body competent of issuing licenses.

3.2. For those business lines or trades that do not fall in the category mentioned in Point 3.1 above, the provincial/municipal Planning and Investment Services shall issue business registration certificates in accordance with the stipulations in Point 1, Section II hereof.

Those enterprises dealing in lines or trades that require practice licenses or business qualifications certificates shall have to fill procedures for being granted such licenses or certificates in accordance with the provisions of law.

III. PROCEDURES FOR LOCATING BRANCHES OR REPRESENTATIVE OFFICES OUTSIDE PROVINCIAL LOCALITIES WHERE PRIVATE ENTERPRISES AND COMPANIES' ARE HEADQUARTERED

Representatives of private enterprises and companies shall submit 1 set of dossiers requesting the location of branches or representative offices to the provincial/municipal Planning and Investment Services where such branches or representative offices are planned to locate. Such a dossier shall comprise:

1. The application for locating of branches or representative offices;

2. Private enterprises' and companies' business registration certificates (valid copies);

3. Stipulations by competent officials of private enterprises and companies regarding power and scope of activities of branches and representative offices and appointment of the heads of branches or representative offices;

4. Certificates on branches' or representatives' transaction offices (house ownership certificates, house leasing contracts or other valid papers evidencing the lawful use of the places as branches' or representatives' transaction offices).

Within 10 days from the date of receipt of valid dossiers, the provincial/municipal Planning and Investment Services shall submit them to provincial People's Committees for issue of licenses to locate branches or representative offices and the Services shall issue business registration certificates to branches or operation registration certificates to representative offices.

IV. REGISTRATION FOR CHANGES IN THE COURSE OF BUSINESS OPERATIONS

1. Registration for changes of business lines or trades

1.1 Those private enterprises and companies that wish to change their business lines or trades must submit declaration forms for change of business line or trade to the provincial/municipal Planning and Investment Services where they made business registration.

- Where application is made for additional business lines or trades in accordance with Article 5 of the Law on Private Enterprises and Article 11 of the Law on Companies, private enterprises and companies shall present a justification of business plan.

- Private enterprises' initial investment capital or companies' charter capital shall not be lower than the legal capital fixed for the business line or trade which has the highest legal capital and which private enterprises and/or companies have registered.

- Presentation of the issued business registration certificates.

1.2. Procedures of registration for changes of business lines or trades:

- Private enterprises and companies making registration of additional business lines or trades shall submit their registration dossiers to the provincial/municipal Planning and Investment Services as stipulated in Point 1.1 of this Section;

- Where private enterprises and companies register additional new business lines or trades that belong to those stipulated in Article 5 of the Law on Private Enterprises or Article 11 of the Law on Companies, they shall comply with the stipulations in Point 2, Section II hereof.

- Where private enterprises and companies register additional business lines or trades that require practice certificates as prescribed by law, they shall comply with Point 3.1, Section II hereof.

1.3. Where private enterprises and companies do not follow the business lines or trades specified in business registration certificates, they shall have to report to the provincial/municipal Planning and Investment Services for removal of such business lines or trades in the issued business registration certificates.

2. Registration for changes of enterprises' head offices

2.1. Changes of head offices within provinces or cities

Private enterprises and companies shall submit a declaration of the change of their head offices together with papers evidencing private enterprises' and companies' transaction offices (house ownership certificates, house leasing contracts or other valid paper proving the lawful right to use the sites where new offices are planned to locate) to the provincial/municipal Planning and Investment Services.

Within 5 days, the Planning and Investment Services shall make registration of the office change in private enterprises' and companies' business registration certificates.

2.2. Moving of head offices to other provinces and cities.

Private enterprises and companies shall make applications for removal of head offices and forward them to provincial People's Committees where new head offices are planned to locate. The provincial/municipal Planning and Investment Services where new head offices shall be located shall receive the applications and submit them to the provincial People's Committees. Within 10 days from the date of receipt of the applications, the Planning and Investment Services that have received the applications shall have to notify the private enterprises and/or companies of whether the provincial People's Committees accept or nor accept the location of their head offices in the provinces and cities. If accepted, the private enterprises and/or companies shall have to send their dossiers to the Planning and Investment Services that have received the applications for registration of the change of head offices in business registration certificates.

Dossiers on registration of removal of head offices to other provinces or cities shall compose:

2.2.1. The provincial People's Committees' permits for private enterprises and/or companies to locate their new head offices;

2.2.2. Papers evidencing the private enterprises' and companies' transaction offices (house ownership certificates, house leasing contracts or other valid papers proving the right to lawful use of the sites where new head offices are planned to locate);

2.2.3. Original dossiers on the establishment of private enterprises and/or companies, which shall be withdrawn from the provincial/municipal Planning and Investment Services where business registration certificates were issued;

The provincial/municipal Planning and Invest-ment Services that issued business registration certificates shall only agree to let private enterprises' or companies withdraw their dossiers when the following documents are available:

a/ The provincial People's Committees' permits for private enterprises or companies to locate their new head offices (valid copies);

b/ Certification by tax offices on private enterprises' and companies' fulfillment of tax obligations in provinces and cities where their former head offices were situated;

c/ Final year's financial reports by private enterprises and/or companies in the course of their business undertaking in the old provinces or cities and their commitments to succeed their legal obligations when moving their head offices to other provinces.

3. Registration of changes in private enterprises' or companies' names

Private enterprises and companies that wish to change their names shall make an application for changes of names and send it to the Planning and Investment Services of provinces and cities that have issued business registration certificates and the written commitment to succeed all the legal obligations of private enterprises and companies that bear the old names.

The provincial/municipal Planning and Investment Services, after examining and finding out that the new names of private enterprises or companies conform to the provisions of law and do not coincide with the names of other private enterprises or companies within the same economic field and the same provinces or cities, shall approve the changes of names and enter the new names of such private enterprises or companies in the section for registration of changes in the business registration certificates.

Within 7 days, the provincial Planning and Invest-ment Services shall register the new names of the private enterprises and/or companies. The latter shall fill the procedures for making new seals, announce on newspapers the timing for registration of new names and commit to succeed all the legal obligations of private enterprises and companies that bear the old names.

4. Registration of replacement of lawful repre-sentatives of private enterprises and/or companies

When replacing owners and directors of private enterprises; lawful representatives of companies, members of the Boards of Management, controllers, companies' directors' boards, private enterprises and companies shall have to make registration thereof at the Planning and Investment Services of provinces and cities where the business registration certificates were granted.

5. Registration of changes in the initial investment capital and/or charter capital

When changing the initial investment capital and/or charter capital, private enterprises and companies shall make declaration and registration of such changes at the provincial Planning and Investment Services that have issued business registration certificates.

5.1. For private enterprises, the owners shall make declaration of the level of increase (reduction) of the initial investment capital.

When reducing the initial investment capital, it must be ensured that the remaining capital shall not be lower than the legal capital for the enterprises' business line or trade which has the highest legal capital level.

5.2. For limited liability companies:

5.2.1. Dossiers for registration of charter capital increase shall comprise:

a/ The report on the charter capital increase and the report on amendments to companies' charters adopted at meetings of capital contributing members;

b/ Any increase of capital by assets must be accompanied with the record on determining the asset values, adopted by members of companies.

5.2.2. Dossiers on the registration of charter capital reduction shall comprise:

a/ Report on charter capital reduction and the report on amendments to companies' charters, adopted at meetings of capital contributing members;

b/ Certification by tax offices of companies' fulfillment of tax obligations;

c/ Reports on financial balance certified by auditors at the time of application for reduction of charter capital;

d/ Announcements on newspapers on reduction of charter capitals.

When reducing the charter capital, it must be ensured that the remaining capital shall not be lower than the legal capital for the companies' business line or trade which has the highest legal capital level.

After 30 days from the date of making announcements on newspapers if there is no claims from creditors, the Planning and Investment Services of provinces and cities shall approve companies' charter capital reduction and the companies shall commit to succeed all the legal responsibilities for their reduction of charter capital toward their creditors before the date of application for reduction of capital.

5.3. For stock companies:

5.3.1. Increasing charter capital by issuing new shares

a/ Reports on amendments to companies' charters;

b/ Permits to issue shares;

c/ Banks' certification of the actual capital after issue of shares.

The provincial/municipal Planning and Investment Services shall register the actual amount of charter capital in business registration certificates after banks have certified the actual capital increase amount.

Where the increase of charter capital is made by increasing the face value of shares (not issuing new shares), it must be unanimously agreed on at shareholders' congress in accordance with companies' Charters and law. Where the capital is increased by way of assets, there must be a record determining the value of assets endorsed at shareholders' congress in accordance with companies' Charters.

5.3.2. Reduction of charter capital shall be made in conformity with the stipulations in Point 5.2.2, Section IV hereof.

6. Changing of business registration certificates

When a private enterprise or a company wishes to change its business registration certificate as it becomes decrepit or due to removal of its head offices, it shall make an application for changing the business registration certificate and forward it to the provincial/municipal Planning and Investment Service. The latter shall change the private enterprise's or company' s old Certificate for a new one with the same business registration number and retrieve the old certificate.

7. Application for reissue of a business registration certificate when it is lost

7.1. When a private enterprise or a company loses its business registration certificate, it shall report to the police office in the place where the certificate has been lost and the agency that has issued it and make announcements on newspapers on such a loss.

7.2. The private enterprise or company shall make an application with certification by the police office to the provincial/municipal Planning and Investment Service for reissue of its business registration certificate.

7.3. After 30 days from the date of making announcements on newspapers, if the enterprise still fails to find its business registration certificate, the provincial/municipal Planning and Investment Services shall reissue the certificate with the same business registration number, clearly stating that it is granted for the second time.

V. ORGANIZATION OF IMPLEMENTATION

1. Within 7 days from the date of issue of business registration certificates or registration of changes for private enterprises and companies, the provincial/municipal Planning and Investment Services shall forward copies of business registration certificates or declarations of changes to the Ministry of Planning and Investment and the tax, statistics and branch managing agencies of the same level.

Private enterprises and companies shall make announcement on newspapers in accordance with the provisions of law.

2. This Circular takes effect 15 days after its signing. The following Circulars shall be no longer effective:

2.1. The Ministry of Justice's Circular No 141/PLDSKT dated March 3, 1992 guiding implemen-tation of Article 3 of Decree No. 221/HDBT of July 23, 1991 and Article 4 of Decree No. 222/HDBT dated July 23, 1991 of the Council of Ministers (now the Government);

2.2. Ministry of Justice's Circular No. 472-PLDS/KT of May 20, 1993 guiding procedures and time limit for issue of licenses for establishment of private enterprises and companies; and

2.3. State Economic Arbitration's Circular No 07/TT-DKKD of July 29, 1991 guiding the business registration.

3. Private enterprises and companies that have been issued establishment licenses and business registration certificates shall not effect again procedures for establishment and business registration stipulated herein.

4. The Planning and Investment Services of provinces and cities shall every month report on the situation of business registration as prescribed to the Ministry of Planning and Investment. The time for sending reports shall be the 5th of every month.

5. The Ministry of Justice and the Ministry of Planning and Investment shall make periodical or irregular inspection of the effecting of procedures for issue of establishment licenses and business registration licenses by provinces and cities.

6. The People's Committees of provinces and cities must not set any additional procedures or files for establishment of enterprises and business registration besides the stipulations hereof. Any problems that arise in the course of implementation shall be reported in writing to the Ministry of Planning and Investment and Ministry of Justice for handling.

Minister of Justice

NGUYEN DINH LOC

Minister of Planning and Investment

TRAN XUAN GIA